SPC Ardmona group a canned fruit and vegetable company

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Background
SPC Ardmona group a canned fruit and vegetable company has agreed for a takeover
bid made by Coca-Cola Amatil Limited. The offer comes after a called off merger offer
between the company and National foods limited and the New Zealand dairy group wanted a
hostile takeover. The merger has an offer of $500 million as a compensatory package from
CC Amatil at $2.12 per share of SPC Ardmona share. The share were suspended and will
begin to trade at $1.78 when it resumes. The shareholders are entitled to receive $2.05 per
share and a dividend retention that is equivalent to three cents cash per SPC share. They can
alternatively opt to get CC Amatil shares which is possible under a scale back option. The
acquisition is subject to the approval from the courts and the shareholders of SPC Ardmona
(CARTWRIGHT, and Cooper, 2016).
A arrangement scheme is an agreement between the shareholders or creditors and the
company that is approved by the courts. The lenders and the shareholders may affect the
amalgamations and mergers due to their rights. The arrangement schemes are executed by
arbitrary changes in the company structures and are used to help in reorganization. The
merger and acquisition between SPC Ardmona and CC Amatil limited is an on-market bid.
The offer price per share to SPC shareholders is about $2.12 which is also the offer price for
the company shares. The type of shares in SPC are ordinary shares and the merger in this
transaction is based on cash deal only (Green, 2016). The shareholders are entitled to receive
$2.05 per share and a dividend retention that is equivalent to three cents cash per SPC share.

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https://www.google.com/search?q=mergers+and+acquisition+simulation&sxsrf
Target Company SPC Ardmona economic rationale to M & A
There is a substantial empirical evidence that shareholders of the target company
benefit substantially. The gains of the target company amount to 20 percent in mergers and
acquisitions and 30 percent in offer tenders above market prices that are prevailing a month
before the merger announcement. Mergers and acquisition may happen due to a decline in
business for the target company, or an increase in competitiveness in the industry (Lebedev,
Peng, Xie, and Stevens, 2015). M&A transactions for the target company SPC gives an
opportunity to cash out at a profit to the shareholder. This is true especially in a
transactionthat is all cash deal. If the acquire pays both in cash and stock, then the Target
company shareholder gets a stake in the acquired sand have a long-term vested interest in the
success of the company.
Economic rationale behind the Acquirer Company CC Amatil Limited
The gains to the acquiring firm are not easy to measure. In fact, many analysts suggest
that shareholders in bidding firms gain very little of insignificantly. There are losses in value
that is subject to the merger announcements and this is not unusual. Overvaluation by the